SINGAPORE CUTS DOWN ON OVERSEAS HOMEOWNERSHIP
Property or land in Singapore allocated for both commercial and residential purposes requires government authorization for foreign buyers.
On Wednesday night, the Ministry of Law (MinLaw) and the Singapore Land Authority (SLA) made public their decision to amend the Residential Property Act (RPA) to include these projects like The Continuum, The Continuum Balance Unit Chart, and The Continuum Price within its scope.
Non-residential land use zones traditionally included mixed commercial and residential constructions like shophouses and certain shopping complexes with apartments above.
The URA defines mixed-use projects as those that have both commercial and residential components. According to MinLaw and SLA, as land allocated for residential use or projects approved for mixed-use are now considered residential property, they are subject to the RPA’s regulations.
Sites zoned for both commercial and residential use are now subject to RPA’s permission requirement for foreign buyers and investors.
Owners from outside the EU who “intend to retain the property as-is” are exempt from the RPA’s permission requirements for the acquisition of land or property.
According to MinLaw and SLA, however, they require permission to keep and rebuild the land. If the seller issued the buyer an Option to Purchase (OTP) before July 20 of this year, the foreign buyer does not need to acquire clearance to purchase the land or property.
Foreigners “can do what they want with the development, including en-bloc,” if they hold around 80% of it. The Singaporean government has increased the levy on foreigners’ primary residences to 60%.
In the meanwhile, Lee warns that market participants may experience uncertainty in the investment sales, collective sales, and shophouse markets as they seek clarification on the new laws brought about by the reform.
For instance, several shophouses in Bugis and the selling of commercial apartments in mixed-use developments with commercial and residential zones may be impacted. Lee said that most newly launched homes are located on property that is already designated as residential and hence would not be impacted.
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